Certain terms used in the following description are defined as follows:    Leg: A non-stop journey between a “departure” station and an “arrival” station.    Segment: One or more legs, sharing the same commercial transportation service (such as a flight) number. A segment is a saleable product.    Interline segment: A segment which is operated or marketed by a carrier (such as an airline) other than a current reference carrier (such as another airline).    Validating carrier: In the context of a multi-leg transportation service, the validating carrier (also known as an issuing carrier) is the carrier that validates or issues tickets, and the carrier that receives money when transportation service (such as a flight) is booked.    Cabin: Physical section of an aircraft, such as First Class or Economy.    IATA International Air Transport Association    ICH IATA Clearing House—The IATA Clearing House provides a service for on-time settling of interline accounts between the world's airlines, airline-associated companies and Travel Partners.    ATO/CTO Airport Ticket Office, City Ticket Office    Bid Price The Bid Price is the minimum revenue at which a carrier wishes to sell a given seat. As far as air travel is concerned, it is a net value (Bid Price) for an incremental seat on a particular flight/leg/cabin in the airline network. The Bid Price can be considered as the marginal value of a given flight/cabin/leg, also referred to as minimum acceptable net revenue, hurdle price, shadow price, displacement cost, or dual cost. The lowest Bid Price amongst the ones defined for the unsold seats in a given leg/cabin is referred to as the Current Bid Price.    Yield The monetary value that an airline associates to a given O&D. Yields are computed based on historical fare data and used to estimate how much revenue the airline would gain from the sale of a ticket. The higher the Yield the higher is the revenue realized by the carrier. A product is defined by several criteria such as the O&D of the passenger, the booking class, the Point of Sale and so forth. The main difference between Yields and Fares is that Yields are average revenues used by the RMS to compute demand and optimize the network, and Fares are used by the Reservation system to price tickets.    O&D Origin and Destination    RMS Revenue Management System—System that calculates and provides inventory controls to Inventory and gathers statistics. This system may also be called the Optimiser.            The RMS determines forecasts of demand for future flights based on statistical historical data and provides results of optimization in terms of inventory controls to be applied to the flight date inventory, in order to maximize the revenue generated by the future flight.            Inventory System The computer system enabling an airline to manage the distribution of its flights, the selling of space and the delivery of related services, such as seating    SPA Special Prorate Agreement—A separate, bilateral agreement between the parties participating in the proration. An SPA defines a different proration methodology than what is specified by the MPA and, when applicable, has the priority on Proviso and SRP.    SRP Straight Rate Proration—The default approach to proration, in which the fare is split pro-rata to weighted mileage. Mileage is weighted to take account of the additional costs of short-haul flights (this varies by world region), with the weighted mileage known as “prorate factor miles”. Each segment between two cities has a prorate factor (PF) computed with TPM being the IATA Ticketed Point Mileage data between the two cities, and an AreaWeightFactor taken from the PMP (Prorate Manual Passenger):PF=WeightFactor·TPM·Area WeightFactorWeightFactor=10.316829·TPM−0.265253             (This formula is provided simply for informational purposes and is subject to change).            Proviso An exception to the straight-rate proration rule. It is possible for a carrier to specify a “proviso”, or fixed revenue amount, for its part of the journey, where the revenue under straight-rate proration may not cover selling and operating costs (which are nonlinear in distance). For this reason, provisos are generally applied to the shorter portion of an itinerary (and in any case are restricted to sectors under 1700 miles). Provisos are applied by carriers within the MPA, but the agreement imposes rules which mean that in some circumstances, the proviso does not apply, and the calculation reverts to straight-rate proration. The most important situation preventing a proviso from being applied is the “minimum prorate rule”. This states that if the residual amount (i.e. the amount of the through fare, less the proviso) is less than a threshold value, then straight-rate proration will be used.    MPA Multilateral Prorate Agreement—An agreement filed by IATA for the division, or “proration” of the revenue from a fare specified between an origin airport and a destination airport, where the journey involves travel on more than one carrier. It applies to international through fares and charges, and domestic through fares and charges either sold separately or in conjunction with international fares for passenger transportation and excess baggage.    Coupon A coupon is a ticket part associated to each segment. It is constituted of various fields such as boarding and de-planning points, the departure date, the flight number, the booking class and the prorated price.    Ticket A ticket is a set of coupons (usually from 1 to 16 coupons), and is associated with a unique identification number, the ticket ID. A ticket contains various fields such as the Point of Sale, the issuance date, the passenger type and the total price.
In the field of the travel industry, when a passenger or a travel agent books an itinerary the request follows the sequence shown in the high level diagram presented in FIG. 1. The travel agent or the web agent sends the sell request to a Global Distribution System 10 which in turn forwards it to a carrier's reservation system 12. The reservation system 12 requests real time Availability from an inventory system 14 of the carrier. The inventory system 14 computes the Availability using booking figures and controls received from a carrier's revenue management system (RMS) 16. If there is sufficient Availability the sell request is accepted and the reservation system 12 prices and tickets the itinerary in cooperation with a ticketing system 20. The priced itinerary is sent to a revenue accounting system 22 which gathers all of the information regarding the operating segments and the revenue earned. The revenue accounting system spreads (prorates) the revenue among the different segments, which can be operated by different carriers. This is true even if all segments are operated by the same carrier, as information is needed as how much revenue a given segment represents. A pricing system 24 can be included and connected with the reservation system 12.
Of particular interest herein is a subpart of the real time Availability Computation process done on Inventory side. The Availability Computation is done using revenue controls provided by the carrier's RMS 16, which forecasts demand and optimizes the carrier's revenue by optimizing its network, and provides the yields associated with a seat in the given booking class. Once the RMS 16 has optimized the carrier's network, the RMS 16 sends the bid prices associated with each flight date. Bid prices are the representation of the expected revenue for the nth seat in the given flight and cabin.
Yields and Bid Prices are used by the airline's inventory to compute an Availability to grant to a given booking class in a given context.
There is now a tendency for carriers to compute the Availability taking into account contextual information available at the reservation system 12. This is possible due to the introduction of, as non-limiting examples, Journey Data (segments already booked in the same record) and some SSR (Special Service Request). In addition other factors can be considered such as point-of-sale (POS), point of journey commencement, etc. Using the contextual information carriers can ensure that they always use the maximum available information to compute the Availability and make sell decisions.
Following this trend and due at least in part to the introduction of journey data in an availability polling request or sell request the inventory system 14 is capable of readily identifying interline context from travel solutions. As the price paid by the passenger for an interline travel solution is spread among the participating carriers, these can reflect this spread of revenue in the Availability Computation process, thereby adapting the Availability depending on those carriers operating the travel solution.
One technique to do this is to modify the Yield according to the context of the request.
The Yields and Yield modifiers definition can change based on the carrier's strategy. For example, one carrier can include the modifiers in the generated Yield values while another carrier can define modifiers to be applied in real time according to the request context. In this last approach, applying the modifiers in real time, at least two primary strategies can be followed. In a first strategy a carrier can use Yields defined over the operating part of the travel solution only, and then apply interline modifiers depending on the connecting carriers. In a second strategy a carrier can define Yields at the same level as the travel solution requested by the passenger, i.e., including all segments, even those not operated by the reference carrier, and then applying interline adjustments on these Yields.
Several algorithms have been implemented to modify/adapt Yields according to the context, mileage based algorithms and possibly some user defined adjustments. However, the result is basically an approximation of what is actually performed by the revenue accounting system 22 with the price paid for the ticket. At the revenue accounting system 22 there can be least three kinds of interline price adjustment: Straight Rate Proration (SRP), Provisos and Special Prorate Agreements (SPA). Note that these are exemplary and non-exhaustive possible types of adjustments.
Provisos are fixed values defined by IATA that are intended to protect the revenue of those carriers operating short-haul transportation service connecting with long-haul transportation services. The price proration is done using the fixed values for the segments in the travel solution, if defined.
The Special Prorate Agreements (SPA) are private agreements between two carriers willing to share revenue under specific conditions; and for those cases covered by the SPA the SPA defines how to share the revenue between the two airlines.
Another solution is to generate Yields and adjustments on a carrier's Revenue Management System using historical data from the revenue accounting system where the coupons are prorated. These adjustments can be generated using historical data (i.e., tickets already prorated) and not dynamically.
One significant issue that can arise using the conventional approaches for yield adjustment is that the same travel solution can have completely different proration solutions when considering the Availability Computation process and the Revenue Accounting process.
While several kinds of Yield modifiers can be used, of most interest herein are real time interline modifiers. The application of Yield modifiers has an immediate impact on the computed Availability.
As an example, assume that two segments between points A-B-C are operated by carriers 1 (C1) and 2 (C2), with C1 being the validating carrier. Within this context these two carriers have an agreement of revenue sharing (SPA) for this context of 25%-75%, but based on the mileage for these two segments the proration is 15%-85%. The inventory system of carrier C2, to compute the Availability, will apply the SRP algorithm (based on mileage), and so will apply a Yield modification of 15%-85% on Yields, expecting that later, once the ticket is priced and the revenue shared, the revenue will be prorated in the same way. However, the revenue is actually shared following the SPA between the two carriers, and thus carrier C2 only receives 75% of the total revenue (not 85%). In this case the inventory system of carrier C2 will grant more Availability for less revenue and, as a result, C2 will suffer most likely a loss of revenue.
Commonly owned WO9200903623 A1 describes the interaction between ticketing system and revenue accounting in real time, and discusses the interaction of two revenue accounting systems willing to agree on a revenue sharing arrangement in real time (at ticketing time). This technique does not bear at all on the Availability Computation process.